Brazil oil workers reject Petrobras wage offer; strike is possible

Leaders of the Federacao Unica dos Petroleiros (FUP) union said the terms broke agreements made in November to end a 20-day strike that was the company's longest in 20 years.Reuters | September 17, 2016, 18:48 IST

RIO DE JANEIRO: Brazil's largest oil workers union strongly rejected on Friday a proposal from Petrobras for a deal over salaries and benefits in their annual talks, increasing the risk of a new strike at the state-led oil company.

Leaders of the Federacao Unica dos Petroleiros (FUP) union said the terms broke agreements made in November to end a 20-day strike that was the company's longest in 20 years.

According to Brazilian labor laws, workers have the right to renegotiate pay and benefits every year on specific dates. Workers usually try to convince companies to increase salaries to levels at least close to the inflation accumulated in the previous 12 months, to compensate for lost purchasing power.

Brazilian inflation reached 8.98 percent in August.

But Brazilian companies have offered almost no raises this year as the country suffered its worst recession in generations.

Petrobras, which is struggling to maintain minimum investments as it tries to manage the largest debt in the oil industry at $125 billion, offered a 4.97 percent increase in salaries, but said it would cut overtime payments and regular working shifts.

"The proposed contract revision that Petrobras presented to FUP and its unions is an affront to workers," FUP coordinator Jose Maria Rangel said in a statement. "Nothing is going to guarantee our demands, the maintenance of our salaries except a fight. FUP and its unions will provide a tough response."

Last year's strike was largely against plans by Petrobras to sell about $15 billion of assets by the end of 2016 and reduce operations at small on-shore fields.

Petrobras also offered to apply the 4.97 percent adjustment to other benefits such as a credit for employees to buy medicines.

Deyvid Bacelar, a FUP leader and former union representative on the Petrobras board told Reuters the chance of a strike this year was increasingly likely.

"Like last year, salary isn't the most important thing, it's preventing the company from using asset sales to secretly privatize Petrobras," he said. "They are using the financial troubles as an excuse, and we are not going to stand for that."

The Petrobras proposal also offers administrative workers on flexible 40-hour week employment plans the option to cut their 40 hour work week to 30 hours in exchange for a 25 percent pay cut, Petrobras said.